Due to an error in its accounting methods, healthcare IT and advanced visualization developer Merge Healthcare of Milwaukee will have to restate previously recognized revenues dating back to 2004.
Merge announced on August 10 that it began a review of its accounting method of recognizing revenue from certain contracts that contain both a license of software and related maintenance and support. The company concluded that its method was in error, and it will restate previously issued financial reports for all of 2004, 2005, and 2006, as well as the first quarter of 2007 (end-March 31).
Necessary corrections also will be included in Merge's second-quarter 2007 report for the three months ending June 30.
Merge also has been notified that its common stock is subject to delisting from the Nasdaq global market, because the company did not file its second-quarter 2007 financial statement on time. The company intends to request a hearing before a Nasdaq listing qualifications panel to review the notice. No action will be taken to delist the company's common stock until the panel has completed its review.
In addition, Merge has suspended its Form S-1 related to the issuance of the company's common stock in exchange for exchangeable shares of Merge/Cedara ExchangeCo Limited. Accordingly, no shares of common stock may be issued for such exchangeable shares until further notice, the company said.
By AuntMinnie.com staff writers
August 14, 2007
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